Buyers of luxury real estate in Thailand have not been affected by the economic contraction caused by the Covid-19 epidemic and by the tightening of the conditions for obtaining bank credit. Currently, luxury property buyers have cash and despite lower interest rates, most of them wants to buy without using bank loan.
The sale of exclusive villas in Phuket has seen an unexpected increase as buyers sought refuge in the crisis of the Covid-19 pandemic. More than 5 billion THB (around 167 million USD) of exclusive primary real estates and secondary luxury homes have been traded at the height of the pandemic.
According to a report made by CBRE Phuket, the interest of local and international home buyers comes from each group with the main reason to invest.
In the second half of 2021, large developers are expected to be more careful when introducing new projects, as buyers have more choices in residential locations that can meet their needs. Note that these projects were able to close the sale in a short period of time, which prompted developers to continue investing in luxury real estate projects.
However, the new supply could exceed demand and cause the market to slow down, as the luxury property market remains a relatively small segment with limited demand.
Given their limited supply, luxury homes for sale priced above 100 million baht enjoyed the highest sale rate, followed by sales of homes between 21 and 30 million baht and 51 and 60 million baht.
Along with the design, location, and build quality all of which play a role in the decision to buy a luxury property, developers need to consider the area and local facilities so that they can increase a unique selling proposition.
Real estate developers in Thailand know the market demand, but more and more of them are venturing into this segment, which will increase the future supply and thus exert pressure on future price growth, by increasing the price. competition and widening the variety of offers.
However, if the developers are able to come up with projects with outstanding features, their project could be successful.
The luxury hotel brands established in Thailand add exclusivity and unprecedented prestige to the branded residences they operate. The international reputation of these residences also arouses the interest of international buyers looking for holiday homes or turnkey investments. This is creating more opportunity and leverage premium sales prices of between 15 to 20%. The growth in branded residences and hotel licensed condominiums, which allow foreign investors to enjoy freehold ownership, play an prime role in this buoyant market
Investing in premium property is an exciting venture offering excellent insight into a niche market as well as the potential for excellent returns.
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